According to research firm AltAssets, 57 private equity firms closed out 2002 with a combined €27.4bn in value. In addition to a 28% fall over 2001, it was just over half the amount raised in 2000, researcher said.
Just a handful of firms accounted for a large proportion of the capital raised in 2002 with nine mega-funds (funds of more than €1bn) comprising €19.6bn of the total. Some 15% of the funds comprised over 70% of the total amount raised.
AltAssets also reported that buyout and venture firms raised an almost equal number of funds but buyouts accounted for more than two thirds of the total fundraising.The buyout industry reasserted itself as by far the most popular sector for investors. Buyout funds made up 30% of the total number of funds raised in 2002, but a much more substantial value of total funds raised with 69%.
Also included in the AltAssets report:
- venture funds (early stage investors) accounted for 28% of the number of funds raised but they only comprised 5% of the year’s value
- generalist funds made up 23% of the number of funds, but only 10% of the value
- funds of funds were also larger in number than in value, with 18% of the number of funds raised accounting for only 6% of the value
- the UK continues to make up by far the largest portion of European fundraising, reflecting the fact that most pan-European funds are based in London. UK-based funds made up 77% of the total value of funds raised in 2002 with €21.1bn. Eight of the nine mega-funds raised this year were UK-based and accounted for €17.7bn.
- France-based funds comprised 12% of European funds with €3.3bn, reflecting investors’ current enthusiasm for French fund managers.
- Scandinavian funds amounted to 4% of the European total with €1.1bn, 47% of which was venture. Three Switzerland-based funds were able to capture €670m for just over 2% of the total value. All of them were fund of funds.
- German-based funds accounted for less than 2% of the total, down from 10% last year. This reflected both the difficult fundraising conditions in the local market and the fact that many of the big private equity investors in Germany are based elsewhere on the continent.
Over three quarters of the funds that closed in 2002 were in the market for more than 12 months, illustrating the increased difficulty in securing commitments, AltAssets said.